StanChart announces $1 bln share buyback, dividend hike as 2023 profit rises 18% (updated)

China Bohai Bank

23/02/2024 04:55

(Adds details throughout)
    By Selena  Li and Lawrence White
       HONG KONG/LONDON, Feb 23 (Reuters) - Standard Chartered
PLC on Friday reported 2023 pre-tax profit rose 18%, in line
with forecasts, and rewarded shareholders with a $1 billion
share buyback and a jump in dividend.
    StanChart  STAN.L   0288.HK , which earns most of its
revenue in Asia, said statutory pretax profit for 2023 reached
$5.09 billion, in line with $5.1 billion from 15 analyst
estimates compiled by the bank.
    The bank took a $850 million impairment mainly from its
stake in Chinese lender Bohai Bank  9668.HK , its second time
writing down the value of the unit as the lender was hit by
increasing bad loans as growth in the world's second-largest
economy sputtered. 
    The hefty loss in China, a core target for StanChart's
strategy, underlines the challenge it faces to expand in the
country as policymakers struggle to arrest a deepening property
crisis and weak consumer confidence.
        A fresh $150 million writedown of its stake in Bohai
Bank, following a $700 million hit earlier this year, reduced
its value to $700 million from $1.5 billion at the start of the
year. 
  
        StanChart said banking industry challenges and the
uncertainty swirling around the property market were to blame
for the decline in the stake's current value. 
  
        The London-headquartered lender also announced a final
dividend of $560 million or 21 cents per share, resulting in a
50% increase of full year dividend payout to 27 cents, greater
than a consensus view of 23.7 cents.
  
        CEO Bill Winters said in a release that the bank targets
to return at least $5 billion over the next three years.
  
    The bank set out restrained new guidance on its future
performance, saying it expected income to grow 5-7% between 2024
and 2026, as against 10% growth in 2023. 
    The lender said it would aim to increase return on tangible
equity, a key profitability metric, 'steadily' from the current
level of 10% to 12% by 2026. 
    "The 'last mile' of inflation may prove stickier than
expected, and geopolitical risks abound," Group Chairman José
Vinals said in the release. 
        "As we begin 2024, the war between Ukraine and Russia
continues, increasing uncertainty for nations in Europe and
elsewhere." 
  
  

 (Reporting by Selena Li in Hong Kong and Lawrence White in
London; Editing by Kim Coghill)
 ((Selena.Li@thomsonreuters.com; +852 39525868;))